UNITED STATES SECURITIES AND EXCHANGE COMMISSION
LITIGATION RELEASE NO. 15592 / December 17, 1997
SECURITIES AND EXCHANGE COMMISSION v. Uniglobe Trading Company, Inc., et.
al., 97 Civ. 08659 (USDC SDNY)
The Commission today filed an amended complaint and obtained emergency
relief in a pending action involving the offer to sell forged and
fictitious treasury bonds purportedly issued by the government of Japan.
Judge Charles Brieant issued a temporary restraining order and other relief
against Northeast Investment Institution, Inc. (Northeast), a Fayetteville,
North Carolina entity and against four representatives of Northeast
including Thomas Patrick McGlon, president and a director; Daniel
Watlington, secretary and a director; William Muwwakkill, vice-president,
treasurer and a director; and Tyrone P. Jones, III, a "special consultant."
The Commission alleged in its complaint that since at least October 1997,
the defendants have been engaging in an apparent scheme to defraud U.S.
investors through the offer of fraudulent Japanese treasury bonds in
violation of the antifraud provisions, Section 17(a) of the Securities Act
of 1933 and Section 10(b) of the Securities and Exchange Act of 1934 and
Rule 10b-5 thereunder. The Commission alleged that Northeast and its
representatives have offered for sale as many as 24 treasury bonds
purportedly issued by the Japanese government totalling 12 billion yen
(approximately [U.S.] $120 million). The fraudulent bonds were seized by
the Federal Bureau of Investigation in October 1997 but the defendants
allegedly continued to offer the bonds alleging that 12 replacement bonds
had been issued representing the same purported 12 billion yen debt
obligation of Japan. The Commission, introducing evidence from the
Japanese government, alleges that bonds are not valid obligations of Japan
and that Northeast and its representatives have used a fraudulent letter
from the Ministry of Finance of Japan purportedly authenticating the bonds.
To prevent Northeast, McGlon, Watlington, Muwwakkill, and Jones from
continuing to offer these and other securities and potentially selling them
to investors, the Commission requested the relief granted by Judge Brieant
including a temporary restraining order, an order freezing the bonds, and
an order that the defendants tender the instruments to the registry of the
Court. Further, the Judge's order requires an accounting from the
defendants of all assets, including financial instruments or government
bonds, held by the defendants or offered by the defendants for sale or
other transfer. In addition to the emergency relief granted today, the
Commission seeks civil penalties against the defendants.
The Commission today also announced that Judge Brieant issued a
preliminary injunction against the five original defendants in that action
who offered to sell forged and fictitious certificates of deposits (CDs)
purportedly issued by an Argentinean bank in addition to the fictitious
treasury bonds purportedly issued by the government of Japan. Judge
Charles Brieant issued the preliminary injunction against Uniglobe Trading
Company Inc. (Uniglobe), a Yonkers, New York entity which claims to assist
clients in the transfer of financial instruments and commodities; two of
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its officers, Clint Holland (Holland) and Margaret Laughrin (Laughrin);
Moorgreen Holdings Limited (Moorgreen), a Gibralter company with offices in
Spain; and a Moorgreen representative, Raymond Nakachian (Nakachian). The
complaint alleged that the defendants have offered for sale at least two,
and possibly as many as sixteen, fraudulent certificates of deposit (CDs)
of Banco de la Nacion Argentina with stated principal amounts exceeding
[U.S.] $100 million each and a false "certificate of custody depost (safe
keeping receipt)" purportedly issued by Deutsche Bank Argentina S.A. The
defendants offered the CDs, due to mature in approximately one year, at
substantial discounts from face value, in cash only transactions. The
Commission, citing evidence from the Argentinean banks, alleged that the
instruments are fraudulent. For additional information, see litigation
release number 15568 (November 21, 1997).
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